There’s no way to sugarcoat this; Americans have become far too comfortable living debt free. Granted, some of life’s necessities require taking loans, but do you really need to charge that coffee bean grinder?
The rise of easy credit has created an instant gratification mindset within which people are seldom willing to save until they can pay for something outright. As a consequence, they often wind up paying far more when interest charges factored into the overall price.
Advantages of Living Debt Free Life
Thus, we say a penny paid is a penny earned. It’s time for a new perspective on debt. Let’s take a look at some of the advantages of living debt-free.
It’s Less Expensive
As we mentioned above, buying things on credit can make them cost more. If you carried a balance on a credit card from month to month during 2018, you paid an average of 13.64 percent in interest on it. This means the price of everything you bought, but didn’t pay for in full, cost roughly 14 percent more than you thought you were paying.
Broader Range of Personal Choices
Most Americans live paycheck to paycheck because of debt. Because of this, one truly significant financial setback can render most people bankrupt.
The situation is much less dire if you’re living debt-free and lose a job. Odds are, you’ll have enough cash saved to tide you over while you look for another position or start a business. Further, you can make a switch with far less risk to your financial situation. If you decide you don’t like your job, or you want to try something new.
A More Relaxed Life
You’re living in fear of losing your income when you’re in debt — whether you choose to acknowledge it or not. And, it’s time for a reality check If you aren’t. The stress of being forced to do something just to keep your head above water can take a serious toll on your mental health. Worrying about paying bills eats into time you could be chilling on a beach bonding with your life partner or your children. This inner peace will ultimately help you lead a more contented existence.
The Ability to Take Advantage of Opportunities
Just heard about a foreclosed house, rare collectibles being sold for pennies on the dollar, or a hot new IPO you can get in on if you have some uncommitted cash lying around? What if your friends suddenly decide to go skiing for the weekend? Maybe you see a great deal on something you need on craigslist; but like all of the other instances above, you have to have some ready cash to get in on it. Opportunities such as these easily leveraged when you have no bills.
Better Financial Security
Again, most Americans, thanks largely to their addiction to instant gratification, are living paycheck to paycheck. Living debt-free helps you set yourself up to ensure money problems never a significant concern. Yes, you’ll still have to be careful to stick to a spending plan and yes, you might never own a Gulfstream jet. However, you will largely come and go as you please and decide where your money goes. Rather than having this dictated to you before the cash even lands in your checking account.
What to Do About It Now
There are all sorts of ways to eradicate debt, depending mostly upon the nature of your situation. If things are already looking a bit dire, consulting a company like Freedom Debt Relief can help you find the best possible solution for your circumstances.
On the other hand, if your finances are still relatively solid, you can approach it in a number of other proactive ways.
Whatever your situation though, when it comes to financial obligations. A penny paid is truly a penny earned.
It’s time you consider a new perspective on debt.